THE PHILIPPINES: 'Our cultural bond with the United States goes back 100 years'
Karin Palmquist

In the general elections on May 10, President Gloria Macapagal-Arroyo beat out her opponent, action movie hero Fernando Poe Jr., for another term as President of the Philippines. President Arroyo's political coalition also won the majority of the seats in the Philippine Congress, increasing the chances that she will be able to push through crucial reform legislation. asked Albert del Rosario, the Philippines' ambassador to Washington, what the reelection of President Arroyo means for his country. His answers are below, in an article that initially ran on April 22.

"The reelection of President Gloria Macapagal-Arroyo augues well for Philippines-US relations," Ambassador Albert del Rosario says. "Together with President George W. Bush, she has reinvigorated our ties. One can expect the strengthening of our relations on all fronts such as defense and security, trade and investments, science and technology, agriculture, fostering of good governance and the promotion of peace process in southern Philippines.

Asked if he sees any significant new developments in US investments or other business involvement in the Philippines as a result of the message sent by this vote, the ambassador says: "The new mandate of President Arroyo sends the main signal that there will be continuity in the Philippine government's policies. These key policies are to further liberalize the economy and to pursue greater structural reforms. These are designed to enhance the country's desirability as a destination for US investments and other foreign investments."

"The election results also reassure US investors about our country's political stability and economic viability," the ambassador continues. "With renewed confidence about the Philippines, an increase in US investments into the Philippines is likely."

President Gloria Macapagal-Arroyo was the first world leader to send a message of support to President George W. Bush after the terror attacks on September 11, 2001, and the Philippines has since emerged as one of America's strongest allies in the war on terror. Even before that, she had made a reputation as one of the most unbending foes of terrorists in her own country and abroad.

There has been a successful bilateral effort to overcome the threat of some of the Philippines' own terror groups, especially Abu Sayyaf, which kidnapped several Americans and terrorized parts of the Philippines but now has been reduced to a shadow of its original strength.

These close relations have also set the stage for a major bilateral project to overhaul the Philippines military. The reform, to cost some $400 million, is a necessity, says Ambassador del Rosario. "Without our military there is no way to properly defend our democracy. We need to reform the military to address internal threats in rural areas, to create a system of intelligence sharing."

The current reform plans have been shaped with the war on terror in mind. Not long ago, the United States helped the Philippines upgrade its military, but at that time the main threat was seen as external, coming from the People's Republic of China. Now, the greater danger is seen in rebel groups, including both Muslim and communist extremists, operating in parts of the Philippines archipelago, especially the southern island of Mindanao. 
Washington's recognition of this danger and the need to support Manila has been translated into steadily increasing civilian and military aid packages over the past few years. Last year development assistance from the United States totaled $100 million, 80 percent of which went to peace and development efforts in Mindanao. Out of the Philippines' 80 million people, five to six million are Muslim, concentrated in Mindanao.

The province is known in foreign media as the Philippine base for several Islamic terrorist organizations and separatist movements, both international and domestic.

The most notorious of these groups is the Jemaah Islamiah, the Indonesia-based terrorist group responsible for the October 12, 2002 Bali bombings. It is considered Al Qaeda's arm in Southeast Asia. "This is the biggest problem," the ambassador says.

Communist insurgents are another long-standing problem. "The CCP-NPA is a 25 year-old problem," the ambassador says, referring to The Communist Part of the Philippines and the National People's Army, a terrorist group with 12,000-15,000 well-armed members scattered over Mindanao and parts of Luzon, and listed in the State Department's list of international terrorist organizations. "The CCP-NPA is in peace talks in Oslo. We are more concerned about Jemaah Islamiah."

The ambassador remains hopeful that his government will manage to quell Jemaah Islamiah. "We have arrested and killed Fathi Rahman Al Ghazi, the central person in Mindanao, as well as Refke, their financial officer in Mindanao," he says. "We have arrested Abdel Jalil, a Jordanian Al Qaeda operative."

Then there is the MILF (Moro Islamic Liberation Front), a breakout group from the notorious MNLF (Moro National Liberation Front). The MILF movement, numbering about 12,000 and with the goal of creating an independent Islamic state, is well armed and located in central Mindanao.

But there is hope that the 500-year conflict between Christians and Muslims, fueled by the rise of Islamic nationalism in the 70s, might find a solution as well.

"MILF is in a peace process mood now. Malaysia, along with the United States, is trying to help us broker peace," the ambassador says.

The peace talks started in April and an international team of observers is helping to secure the ceasefire. There are incentives on both the government and the rebel sides to reach a peace agreement. The United States has pledged a $30 million fund once a peace accord is signed. The money will be used to help create opportunities for people in Mindanao to make a livelihood, and reintegrate them into Philippine society.

Almost crushed, the ambassador says, is Abu Sayyaf, also a breakout group from the MNLF, with the goal of creating an Islamic state.

"At this point, there are about one hundred members of Abu Sayyaf left, relentlessly pursued with the help of the United States. We killed two of their leaders, Abu Sabaya and Mujib Susuka in 2002, and we arrested Commander Robot," the ambassador says. At its peak, Abu Sayyef probably had 2,000 active members.

After the 9/11 terrorist attacks, the Philippines, Malaysia and Indonesia entered a tri-lateral agreement to combat terrorism. The pact's goal was to cut funding sources for terrorists, boost border patrols and facilitate intelligence sharing among the countries.

"The way to fight these groups is to fight their marginalization," the ambassador says. "Efforts are made in areas such as poverty-alleviation and education, to integrate them into Philippine society."

Like Israel, Jordan and Australia, the Philippines is designated a major non-NATO ally. President Arroyo has supported US military efforts in Afghanistan and Iraq, offered her country as a transit and refueling stop. And there is a 97-man Philippine continent in Iraq, mainly health care workers and military police.

"The UN is committed to restoring stability in Iraq, and as a UN member we want to uphold our part of the commitment," the ambassador says.

But cooperation between the Philippines and the United States goes deeper than that.

"We have a deep cultural bond with the United States, going back 100 years. We modeled our legal system on the United States' system, as well as our education and public health care system, our free enterprise and our democracy," the ambassador says.

"The US-Philippine relationship is extremely robust," he continues. "State Department officials have said it is the closest it has been in recent history. It's broad, deep and diverse, encompassing defense and security, trade and investment and poverty alleviation. It's truly comprehensive."

He continues: "The War on Terror has solidified the alliance between the Philippines and the United States. Defense and security assistance amounted to $30 million before the 9/11 attacks. In 2002, that figure had risen to $94 million, and in 2003 to $140 million."

The United States is the Philippines' largest trading partner, with the total trade between the two countries adding up to $14.5 billion. In 2003, for the first time, the trade balance shifted in the United States' favor. The Philippines is studying a free trade agreement with the United States, to make trade even easier. Singapore has already negotiated a free trade agreement with the US.

The United States is also the largest foreign investor into the Philippines. The country has received around $3 billion in foreign investment from the United States, even if last year, for the first year, Japan came in a little ahead in terms of new investment. American investors have traditionally gone for the energy and mining sectors, but since a legislative change opened up the retail sector last year, that has become an interesting prospect as well.

The ambassador says the country has two things in particular going for it: language and location. English is widely spoken in the Philippines, with over three-quarters of the population proficient in English. The country's accessible location has made it a top choice for many companies searching for a Southeast Asian hub. UPS invested $300 million to create a regional hub in the Philippines, and FedEx wasn't slow to follow.

At the same time, the population of Filipinos in the United States is already three million strong, and the second-fastest growing (after Mexicans). Some eight million Filipinos abroad send $8 billion to their families back home each year, 60 percent of that from the US, the ambassador says, noting that this is in known transfers, with officials estimating the real figure is twice that. 

The ambassador says that he believes levels of US investment in his country, let alone tourism, could be much higher. "The whole region is losing out to China," he notes. "Around 80 percent of the foreign direct investment to the region now goes to China."

"We welcome China's entry into the WTO," the ambassador continues. "As a WTO member, China must start playing by the rules. As for us, China is becoming a healthy export market. We see export potential for food products, gift items, wood products, electronic components and tourism. More than half of Hong Kong's tourists are now from Mainland China. We hope to replace declining Japanese tourism with tourists from China."

The Philippines never quite managed to market itself as a tourist destination. While other Southeast Asian nations like Thailand are raking in the tourism dollars, the Philippines' tourism income is rather modest. A lot has to do with marketing efforts. The country's tourism budget is only $600,000, compared to tens of million spent by countries like Thailand and Malaysia.  

"It's not all our fault," the ambassador says, commenting on the tourism figures. "We were hit by things out of our control: SARS, terrorism."

In these election times, there is a lot of discussion of tech jobs disappearing to Asia. An army of well-trained IT workers has made the Philippines a popular location for outsourcing and the country now has around 45 call centers.

"I think it was the CEO of Hewlett Packard who said if U.S. companies don't position themselves to be competitive, they'll go out of business," the ambassador says, emphasizing that protectionism doesn't work in today's global economy.

Globalization has far more positive consequences than negative, he believes. And, after all, bilateral trade, investment and tourism are all part of a bigger US-Philippines relationship that is critical in the global war on terror.